Oracle is going to acquire Cerner in an all-cash deal valued at $28.3 billion, or $95 per share.
The transaction is expected to close in calendar year 2022, subject to regulatory approval and customary closing conditions, and will be immediately accretive to Oracle's earnings on a non-GAAP basis in the first fiscal year after closing.
Oracle CEO Safra Catz said the deal will be a huge revenue growth engine for years to come, as the company dives deeper into the health care sector and looks at a global expansion of its cloud business.
Oracle chairman and chief technology officer Larry Ellison said that the move would help reduce administrative workload for our medical professionals, improve patient privacy and outcomes, and lower overall health care costs. A study by the Mayo Clinic found that physicians spend one to two hours on electronic health records EHRs and desk work for every hour spent face-to- face with patients, as well as one to two hours of personal time on EHR related activities.
Oracle, with a valuation of more than $250 billion, is looking to catch up with tech giants like Amazon and Microsoft, whose valuations have exceeded $1 trillion. Oracle's total revenue rose by 6% year over year to $10.4 billion, according to its second quarter earnings for fiscal year 2022. Cloud services and license support revenues increased by 6% to $7.6 billion, while cloud license and on-premise license revenues went up 13% to $1.2 billion.
The shares of the company have slipped more than 4% after the announcement, while the stock of Cerner is trading flat.